Key Takeaways

  • Historically, the biggest financial gains for a company's stakeholders are often realized after its IPO, not during the private funding rounds leading up to it. Andrew Feldman from Cerebras cites studies showing “more money's made after IPO than before.”
  • Despite this, many Limited Partners (LPs) exert pressure on Venture Capitalists (VCs) to distribute public shares too early, inadvertently leaving substantial public market upside on the table.
  • Planet Labs defied this trend; CEO Will Marshall noted that most of their early investors, including Google (their largest single investor), held onto their shares post-IPO, capturing significant returns.
  • The prevailing "stay private forever" mantra is reversing. Chamath Palihapitiya observes that many companies in his portfolio are now eyeing earlier IPOs at lower valuations—think $1 billion to $5 billion.
  • Public market scrutiny is not a weakness but a strength. Jason Calacanis argues that the continuous need to deliver publicly "sharpens the focus" and drives better innovation.

The Real Payday: Why Earlier IPOs Create More Wealth

The conventional wisdom in Silicon Valley for the last decade has been clear: stay private as long as humanly possible. Hoard valuation, control your narrative, and avoid the "hassle" of public markets. But this episode of the All-In Podcast, featuring Cerebras CEO Andrew Feldman and Planet Labs CEO Will Marshall, offered a sharp counter-narrative, suggesting that founders are actually leaving massive amounts of money on the table by delaying their public debut.

Andrew Feldman didn't mince words, stating a simple, often overlooked truth: “I think historically more money's made after IPO than before. Yeah. I I I think every single study shows that there is more money to be made both in percentage and in in what we care about which is absolute.” This isn't just about small gains; it's about the majority of wealth creation occurring once a company trades on public exchanges. Yet, many founders and early investors never see it, pressured by LPs who demand early distributions, eager to show returns in their funds.

Will Marshall shared a powerful anecdote from Planet Labs, a company that went public. When asked if early investors held onto their shares, Marshall confirmed, “Most of them did. Yeah, most of them did, which is really smart on their part.” He specifically highlighted Google, their largest single investor, noting, “Google hasn't sold a share.” This patience allowed those investors to capture the real, long-term value creation in the public market—a rare move in a landscape dominated by quick exits.

This isn't just a nostalgic look back; it's a forward-looking shift. Chamath Palihapitiya noted a significant pendulum swing, explaining, “I actually think the public markets may be shifting back in this direction and a lot of the companies in our portfolios are now thinking about going public at a billion or three billion or 5 billion.” This move toward earlier, smaller IPOs allows public market investors to participate in the growth story, potentially creating a more liquid and appreciative shareholder base over time.

Beyond financial returns, there's a compelling argument for the operational benefits of public life. Jason Calacanis articulated this, saying, “I do think that getting public sooner having the scrutiny of public markets having the scrutiny of having to deliver sharpens the focus it steel sharpens steel iron sharpens iron and I think innovation tends to get better.” The constant pressure to perform, report, and innovate in the open can forge a stronger, more disciplined company than one hidden from public view. The implicit challenge here is that founders comfortable staying private may be avoiding the very mechanisms that could force their company to evolve and improve.

What to Do With This

Stop reflexively chasing higher private valuations. Instead, run a scenario analysis on your next 12-18 months, modeling an earlier IPO at a modest valuation (e.g., $1-3 billion) compared to another private round. Present this to your board and VCs, specifically challenging them on their distribution strategies and citing Planet Labs' long-term investor success. Force a conversation about maximizing all shareholder wealth, not just short-term fund returns.